Eenie, Meenie, Miney, Moe.
With the rise of disruptive vacation rental listing platforms, many are considering a channel management strategy and asking, “which listing platforms are right for me?”
The way most hosts or vacation rental managers answer this question is by considering two factors:
- Broad assumptions about the types of properties listed on each, and the types of guests each one attracts. For example, it’s commonly thought that Airbnb caters to weekend warriors and business travelers, while HomeAway focuses on larger properties for vacation goers looking to stay a week or more.
- Differences in listing platform fee structures. Some platforms charge a flat fee, some are commission-based, and others are mix.
Until recently, there wasn’t a more rigorous way to analyze the differences between distribution channels. As Airbnb, HomeAway, Booking.com and others fight to gain market share, those initial assumptions are becoming moot, and choosing channels based on fees alone completely disregards performance.
In March 2019, AirDNA launched its proprietary listing match algorithm that deduplicates properties listed on Airbnb and HomeAway. This innovative development provides a more accurate view of vacation rental supply worldwide and enables us to analyze performance based on which rental channels a property is listed on.
In this blog post, we’re focusing exclusively on entire home vacation rentals within seven U.S. markets that are listed on Airbnb, HomeAway, or both. We chose markets across several regions that have substantial supply with a relatively even distribution of rentals across those three categories.
Moment of Truth—Vacation Rental Metrics by Market
In terms of Occupancy, it’s a bit of a toss-up; there’s no clear winner. Entire home rentals that are listed on Airbnb (and not HomeAway) achieved the highest occupancy in Denver. The fact that Airbnb didn’t dominate across more markets for this metric runs contrary to the general consensus that it pushes a heads in beds-first approach.
Rentals listed on HomeAway (and not Airbnb) achieved the highest occupancy in Gatlinburg, Myrtle Beach, and Phoenix, leaving those that are dual-listed winning in Honolulu, Miami Beach, and New Orleans.
When it comes to Average Daily Rate (ADR), we begin to see a separation. Entire home rentals listed on both platforms earned a higher ADR than those listed on one or the other. Dual-listed rentals earned a higher ADR in Honolulu, Miami Beach, Myrtle Beach, and Phoenix—and came within $1 of a tie with HomeAway-only listed rentals in Denver.
Rentals listed on Airbnb (and not HomeAway) achieved the highest ADR in only one of the seven markets; Gatlinburg.
The divergence continues, with dual-listed entire home rentals out earning those listed on one or the other in six of the seven markets—in some cases, earning 2x more than those listed on just one.
Why the Disparity in Channel Performance?
One reason is that dual-listed rentals are more likely to be managed by a professional property manager. In fact, 32% of dual-listed rentals are associated with a professional property management company, versus just 21% that are listed on only HomeAway, and even fewer that are listed only on Airbnb.
In addition to benefiting from organized marketing, channel management, and rate management, professionally managed properties are more likely to be full-time rentals, thus being available for rent more days than their part-time counterparts.
The Missing Piece: Available Days
Total revenue is a compelling way to compare rentals, but it doesn’t take into account differences in the number of days they were available over the past twelve months.
It’s possible for a rental that had lower occupancy and ADR to have made more revenue than a rental with higher occupancy and ADR—simply because it was available for rent more days during the year.
|Vacation Rental #1||Vacation Rental #2|
|Number of Days Available for Rent||100||300|
|Average Daily Rate||$200||$100|
Multiplying occupancy rate by ADR lets us see the total revenue distributed across all available days. This metric is called Revenue Per Available Rental (RevPAR).
RevPAR smooths out variances in available days across vacation rentals in a way that lets us compare their performance apples-to-apples.
When looking at RevPAR, dual-listed entire home rentals out-earned those listed on one or the other in six of the seven markets. In fact, Myrtle Beach was the only market where rentals listed on HomeAway earned the highest RevPAR.
Those listed on Airbnb (and not HomeAway) earned the least revenue per available rental in five of the seven markets, and didn’t earn the most in any.
How to Optimize Your Channel Management Strategy
We’ve concluded that rentals listed on both Airbnb and HomeAway typically earn higher RevPAR and more total revenue. But what does that mean? What are the actionable takeaways?
- Market intelligence: understanding the breakdown of rental channels in your area, as well as ADR, occupancy, revenue, and RevPAR of nearby competitive rentals. There are clear benefits from working with property managers, but market and guest insights aren’t limited to professionals. AirDNA’s MarketMinder shows you the breakdown of rental channels in your market to help you determine which channels might be best for you.
- Channel management: as listing platforms compete for market share, the distribution of listings across rental channels will evolve and change. For example, a market that’s dominated by Airbnb this month may shift toward HomeAway in six months, or vice versa.
Initiating channel management helps hedge against an evolving market, and offer greater visibility for your rental.
Partner With a Channel Manager
What Does Channel Distribution Look Like in Your Market?
Your biggest competitors are likely listing their properties on multiple platforms. Do you know the distribution of HomeAway and Airbnb listings in your market? With the latest MarketMinder update, you can instantly see which platform is most popular with hosts in your market—and make better decisions about your short-term rental strategy.